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Civil Service

How the Civil Service is contributing a stronger economy

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Sir Nicholas Macphearson, Permanent Secretary at HM Treasury
Sir Nicholas Macpherson, Permanent Secretary at HM Treasury

Perusing statistical releases is one of the most enjoyable aspects of my job. And this has been a bumper week for economic statistics.

We have seen annual inflation fall to 0.3 per cent in January, on the back of falling oil prices and stronger Sterling.

We have seen strong labour market data. The proportion of working age people in employment has reached a record level at 73.2 per cent. And unemployment continues to fall: it is down by almost half a million in the last year. The claimant count at 2.5 per cent is at its lowest rate in 7 years. It only has to fall a further 0.2 percentage points and it will be at its lowest rate since the glory days of 1975. Vacancies continue to rise. And average earnings are trending upwards: total pay is up 2.1 per cent on a year ago. For the first time in a long time a recovery in real wages seems under way.

The public finance figures today confirms this trend. Net public borrowing in the year to date is running £6 billion lower than it was this time last year. Receipts are up 3.5 per cent in the year to date; spending is only 1.4 per cent higher. Corporation tax receipts in January were 12 per cent up on last year. Self-assessment receipts were 16 per cent higher, admittedly swelled by forestalling associated with the reduction in the top rate of tax. But VAT and PAYE revenues also look solid.

Of course, the strong recovery over the last 2 years follows 5 years when conditions were much tougher. And there are still risks out there, not least from the Eurozone.

To a large extent, the performance of the economy is driven by global forces and so is outside the control of government. But there are some areas where civil servants can make a real difference.

Public sector organisations playing their part

Today I would like to pay tribute to 3 organisations which have played their part in this week’s positive figures.

First, Jobcentre Plus and its parent organisation, the Department for Work and Pensions, have done an extraordinary job over the last twenty years in making Britain’s labour market one of the most dynamic and flexible in the world. Some 200,000 people leave the unemployment register each month. And that is down to the excellent service advisers in Jobcentres provide up and down the country in encouraging people to move into work.

Secondly, Her Majesty’s Revenue and Customs (HMRC) which continues to get the revenue in: some £69 billion in January alone. Few people enjoy paying tax. Indeed, this week’s publicity around HSBC’s Swiss subsidiary is a reminder that some will go to great lengths to avoid paying tax at all. But HMRC continue to do all in their power to ensure revenue collection is effective and efficient. And I was really pleased to see the National Audit Office – no pushover when it comes to praise – recently say in a report “we consider HMRC to be among the strongest government departments as regards its managerial competence and its robustness in managing the risks.”

Finally, the Office for National Statistics, which produces high quality statistics week in week out. This is no mean feat given the complexity of the modern service driven economy. Official statistics sometimes come in for criticism because of the extent of revisions. But countries which do not revise their statistics are almost certainly not telling the whole truth. And it is always tempting to blame the messenger. In my view, the independence and rigour of our statisticians are assets worth celebrating.

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  1. Comment by charlie posted on

    How can you say the recession was just a result of the financial crisis when more independent bodies sy that the government overspending made us fundamentally less prepared for a recession and made it deeper. I am sure it is convenient for the civil service to blame anything other than public finances but surely it is time no to review the competence and cost of our civil service.

  2. Comment by John posted on

    Average Earnings are up 2.1%.
    Unless you are a Civil Servant.........
    I feel motivated and valued...not.

  3. Comment by T posted on

    I salute to three teams for our economy especially Dept of Works & Pensions, who is helping people to get a job. I pray it never stop. Amazing recovery never stops. We never see recession again.